Legislation review in Agricultural Land, Renewable Energy, Tax and Customs, Other.
The State Budget of Ukraine for 2012 turns out to be the most distorting for agricultural markets since 2008. The share of agricultural expenditures in the total state budget expenditures and in the country’s GDP, though, are the lowest for the last 6 years.
According to the preliminary data, real GDP grew by 5.2% in 2011, which is close to our estimate. We are likely to keep our real GDP growth forecast close to the current estimate at 3.6% with a possibility of some downward revision.
Meanwhile, we are likely to keep our forecast for real GDP growth at 3.6% in 2012. This estimate is based on the assumptions of stabilisation of debt situation in the EU in the first half of the year and returned confidence in the global economy in the second half of the year.
Recent months were marked by worsening outlook for global economic growth. In Europe economic sentiment fell to the worst level in two years pointing to the recession in the end of this year, while in other regions growth slowed. At the same time, magnitude of the crisis is by no means certain.
In October the Industrial Confidence Indicator made up 0.01. Its value decreased by 3 points in comparison to July.
Assessment of business climate stabilized at a neutral level. Index of business climate assessment equals zero after decreasing slightly from the level of 0.06 in the 1st quarter of the current year. In the 2nd quarter of 2011, the number of banks that evaluated business situation positively somewhat increased: from 5.6% in the 1st quarter of 2011 to 11.1% in the 2nd quarter.
According to the preliminary Ukrstat’s estimates real GDP growth accelerated to 6.6% yoy in the third quarter of 2011. It is significantly higher than we expected, what could result in upward revision of forecast of real GDP growth above current 4.6% for the year.
The talks about the possibility of another global economic crisis continued. The IMF, the OECD and other forecasters downgraded the forecasts of global economic growth for 2012 and warned about large downward risks.
In July the Industrial Confidence Indicator made up 0.04. After the sharp increase in April compared to February by 24 points (from -0.14 to 0.10), it has decreased by 6 points in comparison to April.